non-manufacturing index

The bond market didn’t take the positive jobs and housing numbers well, as the MAR14 U.S. 30-year bonds are down 27 ticks to 129’11. If this is any precursor to Friday’s jobs report, we could see another bond market sell-off in two days.

If we get a big jobs number on Friday, the market could start to price in a December or March taper, and the equity markets could head lower. Overall, we still believe we are in longer-term bull market.

U.S. stocks fell, with the Standard & Poor’s 500 Index sliding a second day, as data showed weaker-than-forecast growth in service industries and concern grew that the political impasse could lead to a recession.

Hedge funds’ combined holdings in gold futures increased to the most bullish since January on mounting concern that conflict in the Middle East will boost crude-oil prices, slowing economic growth and stoking inflation.